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DCP today announced it has completed a series C investment in Honest Dairy Group (“Honest Dairy” or the “Company”), the parent company of Simple Love Yogurt. This round of investment is led by DCP, alongside co-investors including QY Capital, VMC, Guangzhou Finance Holdings, and Proterra Investment Partners, with Cygnus Equity acting as the financial adviser. The proceeds will be used to improve the Company’s supply chain efficiency and capabilities, product innovation and to create value for consumers.

Honest Dairy, the parent company of Simple Love Yogurt, is one of the few leading dairy companies in China that focuses on short-shelf-life yogurt with no additives. Adhering to the mission and vision of "producing safe and high-quality milk for our families and children", Honest Dairy took the lead in introducing the concepts of “additive-free”, “precise sugar control”, and “zero sugar” to its multiple bestselling brands, including “Simple Love” and “Father’s Love”. Meanwhile, to secure stable and high-quality raw milk supply, the Company has built a large-scale in-house cow farm on the “41°N golden dairy belt” and formed strategic partnerships with world-class dairy companies - Greenfields Dairy and You Zhuo Dairy. In the past six years, Honest Dairy gained market share rapidly and has achieved a revenue CAGR of over 100%. It has become the top short-shelf-life dairy brand in the major supermarket and hypermarket channels.

As consumer disposable incomes rise amidst a greater focus on health and wellness, China's short-shelf-life dairy market has been growing rapidly in recent years, aided in part by the development of a cold chain logistics network. In 2021, China's short-shelf-life yogurt market size reached nearly RMB 70 billion, but per capita consumption is still relatively low compared with developed markets, implying significant potential for consumption upgrade and market growth. As consumers increasingly value health, nutrition, quality and safety of dairy products, the high-end short-shelf-life yogurt category has outperformed the overall market with a CAGR close to 30% over the past three years and its penetration rate increased from 8% to 15%.

Mr. Xia Haitong, founder and CEO of Honest Dairy, said: "Despite of Covid-19 impact, China’s consumption spending trends remain robust. We firmly believe that a desire for better quality products is a key driver of demand among new middle class consumers. Honest Dairy will continue to focus on its product innovation capabilities, deliver more value for our customers and provide the best quality dairy products. We are honored by the continued support from DCP and other investors. The DCP team has a strong investment track record in China’s dairy sector and has nurtured many industry leaders. In addition, they have also accumulated deep industry knowledge and operational expertise”  

Mr. Julian Wolhardt, CEO of DCP, said: "We are delighted to be a long-term partner of Honest Dairy and support its rapid development. With relentless effort and persistence in R&D, production and cold chain logistics, Honest Dairy has built up its high-quality product portfolio and strong brand equity. As Honest Dairy expands its supply chain capabilities, we believe it will experience significant further growth. Driven by consumption upgrade and the rapid growth of online channels, China's dairy industry will embrace further transformation and upgrade. Going forward, DCP will continue to fully leverage our deep operational expertise and rich industry resources and work closely with Honest Dairy's outstanding management team to bring high-quality, fresh and safe dairy products to consumers. "

About Honest Dairy:

Founded in 2014, Honest Dairy (Group) Co., Ltd. is a vertically integrated short-shelf-life dairy company with operations covering dairy farming, R&D, production and sales. Since its inception, Honest Dairy has adhered to the mission of "producing safe and high-quality milk for our families and children", and launched multiple brands including Simple Love and Father’s Love, which are well received by the market. Till 2021, Honest Dairy’s products are sold in more than 30,000 points of sale in over 220 cities across the country as well as on e-commerce platforms such as Tmall and JD.com, with over 4 million online followers.